Exhibit 10 (viii)
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MONROE BANCORP
DIRECTORS' DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective January 1, 1999)
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MONROE BANCORP
DIRECTORS' DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective January 1, 1999)
TABLE OF CONTENTS
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ARTICLE
PAGE
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INTRODUCTION .....................................................
1
I.
DEFINITIONS
..................................................... 1
1.1 Accounting
Date.......................................... 1
1.2
Board....................................................
1
1.3
Committee................................................
1
1.4
Company..................................................
1
1.5
Director.................................................
1
1.6
Disability...............................................
1
1.7
Fees.....................................................
1
1.8 Fiscal
Year.............................................. 1
1.9 Individual
Account....................................... 1
1.10
Participant..............................................
1
1.11
Participation Agreement..................................
1
1.12
Plan ....................................................
2
1.13
Plan Sponsor.............................................
2
1.14
Rabbi Trust..............................................
2
II.
PARTICIPATION.....................................................
2
III. DEFERRALS AND
ALLOCATIONS......................................... 2
3.1 Deferral
Account......................................... 2
3.2
Accounting...............................................
2
3.3 Crediting
of Deferrals................................... 3
IV. INVESTMENT
OF CONTRIBUTIONS.......................................
3
4.1 Conversion
of Accounts................................... 3
4.2
Investments .............................................
3
4.3 Unsecured
Contractual Rights............................. 3
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V.
DISTRIBUTIONS.....................................................
4
5.1
Time of Payment of
Benefits.............................. 4
5.2 Method of
Payment of Benefits............................ 4
5.3 Benefit
Payment Elections................................ 4
5.4 Death of
the Participant and Beneficiary Designation..... 5
VI. PLAN
ADMINISTRATION...............................................
5
6.1
Administration by the Committee..........................
5
6.2 Power and
Responsibilities of the Committee.............. 6
6.3
Liabilities..............................................
6
6.4 Claims
Procedure......................................... 7
VII. AMENDMENT AND
TERMINATION OF THE PLAN............................. 7
7.1 Amendment
of the Plan.................................... 7
7.2
Termination of the Plan..................................
7
VIII.
MISCELLANEOUS.....................................................
7
8.1 Governing
Law............................................ 7
8.2 Headings
and Gender...................................... 7
8.3
Participant's Rights; Acquittance........................
7
8.4
Spendthrift Clause.......................................
8
8.5
Counterparts.............................................
8
8.6
Limitations on Liability.................................
8
8.7 Incapacity
for Participant or Beneficiary................ 8
8.8 Corporate
Successors..................................... 8
8.9 Evidence
............................................... 8
8.10
Severability.............................................
8
SIGNATURES
..................................................... 9
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INTRODUCTION
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The purpose of this Plan is to permit Directors of the Plan
Sponsors to
defer the receipt and resulting taxation of
the Fees received from Plan Sponsors
for services as a Director of Plan
Sponsors.
ARTICLE I
DEFINITIONS
-----------
Whenever the initial letter of the following words or phrases
is
capitalized in this Plan, those words and
phrases shall have the meanings stated
below unless a different meaning is plainly
required by the context:
1.1 "Accounting Date" means the last day of each month (and any
other
date selected by the Committee).
1.2 "Board" means the Board of Directors of the Company.
1.3 "Committee" means the Compensation Committee of the Board.
1.4 "Company" means Monroe Bancorp.
1.5 "Director" means any duly elected and serving member of the
Board
of Directors of a Plan Sponsor.
1.6 "Disability" means any mental or physical disability that
would
render the affected Participant unable to
perform his or her duties as a
Director.
1.7 "Fees" means all fees payable to a Director for a Fiscal Year
for
services rendered to a Plan Sponsor as a
Director with respect to such Fiscal
Year.
1.8 "Fiscal Year" means the calendar year.
1.9 "Individual Account" means the individual bookkeeping
account
maintained for each Participant in
accordance with Section 3.1 which shall be a
book reserve account and shall be recorded
on the financial books and records of
the Company as a liability owed to the
Director.
1.10 "Participant" means a Director who becomes a Participant
pursuant
to the provisions of Article II of the
Plan.
1.11 "Participation Agreement" means one or more written
agreements
between the Participant and a Plan Sponsor
pursuant to which the Participant
elects to defer all or a portion of
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his or her Fees, designates his
beneficiary(ies), elects a form of distribution
and elects the time at which his benefit
will be distributed under the Plan.
1.12 "Plan" means the deferred compensation plan embodied herein,
as
amended from time to time, known as the
Monroe Bancorp Directors' Deferred
Compensation Plan as amended and restated
effective January 1, 1999.
1.13 "Plan Sponsor" means the Company and any other entity the
Company
allows to adopt and become a co-sponsor of
the Plan.
1.14 "Rabbi Trust" means the rabbi trust established by the
Company
with a corporate trustee to provide for the
benefits created by this Plan.
ARTICLE II
PARTICIPATION
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Each Director, while a Director, may elect to defer the receipt of
all
or a portion of the Fees he or she would
otherwise receive with respect to a
Fiscal Year. The election to defer shall be
made by the execution of a
Participation Agreement and shall be
effective with respect to services rendered
during the Fiscal Years which commence
immediately after the date the Director
elects to defer the receipt of Fees. Each
Director shall have the right to amend
or revoke his or her election to defer the
receipt of his or her Fees for any
Fiscal Year which commences immediately
after an amended Participation Agreement
is delivered to the Committee.
ARTICLE III
DEFERRALS AND ALLOCATIONS
-------------------------
3.1 Deferral Account. The Committee shall establish and maintain
an
Individual Account in the name of each
Participant, to which the Committee shall
credit the Fees deferred by the Participant
pursuant to Article II and from
which the Committee shall debit all amounts
paid to the Participant or his
designated beneficiary pursuant to Article
V.
3.2 Accounting. As of each Accounting Date, the Participants'
Individual Accounts will be adjusted as
follows:
(i) First, by
charging a Participant's Individual Account
with any payments made to or on behalf of that
Participant or his designated beneficiary since the
last Accounting Date.
(ii)
Second, by adjusting the balances in all the
Participants' Individual Accounts, pro rata, so that
the total of the Individual Account balances equal
the adjusted net worth of the Rabbi Trust fund (as
determined below) as of that Accounting Date.
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(iii)
Finally, by crediting each Participant's Individual
Account with any deferred Fees that are to be
allocated to his Individual Account as of that
Accounting Date.
The "adjusted net worth of the Rabbi Trust
fund" as of any Accounting Date means
the fair market value of all the property
held by the trustee under that trust
on that date, less an amount equal to the
contributions made to the trustee
since the previous Accounting Date.
3.3 Crediting of
Deferrals. All amounts deferred by a Participant
pursuant to Article II shall be credited to
the Participant's Individual Account
effective as of the last day of the month
in which the deferred Fees are
contributed to the Rabbi Trust. Deferred
Fees will be contributed to the Rabbi
Trust as soon as practicable following the
date the Fees would otherwise have
been paid to the Participant had they not
been deferred.
ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
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4.1 Conversion of Accounts. Prior to June 30, 1998, Individual
Accounts
were deemed to be invested in Monroe Stock.
Effective as of June 30, 1998, each
Participant's Individual Account was
converted to a dollar value by multiplying
the number of "shares" allocated to the
Participant's Individual Account
(including the cash dividend on Monroe
Stock to paid on or about June 30, 1998)
times the per share fair market value of
Monroe Stock as of that date. This per
share fair market value was determined by
the Board of Directors after reference
to a written valuation of Monroe Stock, on
a minority, nonmarketable basis,
prepared by Hoefer & Arnett. From July
1, 1998 through December 31, 1998,
earnings were credited to each
Participant's Individual Account at a rate equal
to the rate paid on December 31, 1998 for
three-year notes issued by the U.S.
Treasury. Effective on the date on which
amounts credited under the Plan are
first transferred to the Rabbi Trust, which
date shall be on or as soon as
possible after January 1, 1999, the
adjustment to each Participant's Individual
Account shall be determined by the earnings
on the investments made under the
Plan through the Rabbi Trust.
4.2 Investments. All deferrals under the Plan shall be credited to
each
Participant's Individual Account as
provided in Section 3.2. The Participant may
request that the trustee of the Rabbi Trust
invest his Individual Account in any
investment approved by the Committee from
time to time. The Committee may
establish any rule or procedure it deems
necessary or desirable concerning the
Participant's ability to request or failure
to request the investment of the
Rabbi Trust funds. No provision of the Plan
shall impose or be deemed to impose
any obligation upon the Company, other than
an unsecured contractual obligation
to make a cash payment to Participants and
their beneficiaries in accordance
with the terms of the Plan. Benefits
payable under the Plan shall be paid
directly by the Company from its general
assets to the extent not paid from the
Rabbi Trust.
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4.3 Unsecured Contractual Rights. The Plan at all times shall
be
unfunded and constitute a mere promise by
the Company to make benefit payments
in the future. Notwithstanding any other
provision of this Plan, neither a
Participant nor his or her designated
beneficiary shall have any preferred claim
on, or any beneficial ownership interest
in, any assets of the Company prior to
the time benefits are paid as provided in
Article V, including any Fees deferred
by the Participant. All rights created
under this Plan shall be mere unsecured
contractual rights of the Participant
against the Company.
ARTICLE V
DISTRIBUTIONS
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5.1 Time of Payment of Benefits. All amounts credited to a
Participant's Individual Account, including
any adjustments credited in
accordance with Section 3.2, shall be or
commence to be distributed to or for
the benefit of a Participant (or his
designated beneficiary) as soon as
practicable following the Participant's
death or Disability or, if earlier, the
later of (i) the last day the Participant
is serving as a Director, or (ii) an
age specified by the Participant in his
most recently filed Participation
Agreement. The election of the age at which
benefits hereunder may be
distributed may be amended by the delivery
of an amended Participation Agreement
to the Committee as described in section
5.3.
5.2 Method of Payment of Benefits. The balance of a
Participant's
Individual Account shall be paid by the
Company in cash or kind, as determined
by the Committee, in one of the following
methods effectively elected by the
Participant in a Participation
Agreement:
(a) A single
lump sum.
(b)
Installments payable at such monthly or annual
intervals, over a period not in excess of 10 years,
as shall be elected by the Participant.
5.3 Benefit Payment Elections.
(a) In order
to be effective, a Participant's election of
the manner in which his benefits shall be distributed
(including benefits which become payable as a result
of the Participant's death) must be made by
delivering
a Participation Agreement or an amended
Participation Agreement to the Committee not later
than 60 days prior to the beginning of the Plan Year
in which the distribution event occurs. If the
Participant does not elect a form of distribution
under Section 5.2, or such election is not timely or
properly made under this Section 5.3, his entire
benefit shall be distributed in the form of a single
lump sum.
(b) In the
event a Participant properly elects and is
eligible to receive his Individual Account in the
form specified in Section 5.2(b), the Participant
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must specify in his written election the number of
years over which
the installments are to be
distributed.
5.4 Death of the Participant and Beneficiary Designation.
(a) Form and
Time of Payment. In the event of a
Participant's death, the balance in his or her
Individual Account shall be paid to the Participant's
designated beneficiary in a single lump sum. Such
distribution shall be made as soon as practicable in
which the Participant's death occurs. If the
Participant dies after distribution of his benefits
under the Plan has commenced, his remaining benefit,
if any, shall be distributed in the same manner and
at the same time(s) as such benefit was being
distributed prior to his death, or in a single lump
sum,
if effectively elected by the Participant in his
most recently filed Participation Agreement.
(b)
Designation of Beneficiaries. The Participant may
designate a primary and contingent beneficiary or
beneficiaries on forms provided by the Committee,
which for this purpose may include the Participation
Agreement. Such designation may be changed at any
time for any reason by the Participant and without
notice to or consent of any prior or future
beneficiaries. If the Participant fails to designate
a beneficiary, or if such designation shall for any
reason be illegal or ineffective, or if the
designated beneficiary(ies) shall not survive the
Participant, his benefits under the Plan shall be
paid: (i) to his surviving spouse; (ii) if there is
no surviving spouse, to the duly appointed and
qualified executor or other personal representative
of the Participant to be distributed in accordance
with the Participant's will or applicable intestacy
law; or (iii) in the event that there shall be no
such representative duly appointed and qualified,
then to such persons as, at the date of his death,
who would be entitled to share in the distribution of
the Participant's estate under the provisions of the
applicable statutes then in force governing the
descent of intestate property, in the proportions
specified in such statute. The Committee may
determine the identity of the distributees, and in so
doing may act and rely upon any information it may
deem reliable upon reasonable inquiry, and upon any
affidavit, certificate, or oth
